Tens of thousands of households will be able to bulk buy cheap gas and
electricity by clubbing together under a new scheme by Which?.

The consumer group is collecting signatures from people who are fed up with high energy bills, which average £1,260 a year.

Which? will then invite the UK’s energy suppliers to take part in a so-called “reverse auction”, in which participants try to outbid each other with lower prices.

The supplier that commits to the lowest energy price will win the petition’s signatories as customers.

The campaign, which is called The Big Switch, is that the more people sign up to the list, the lower the prices will be. The campaign – which was welcomed by ministers – works along the same principles of group buying sites such as Groupon.

Which? estimates that up to £250 could be knocked off every household bill as result of its campaign, which launches today.

Richard Lloyd, executive director at Which?, said that thousands of consumers tell the groups that they want “a much better, affordable energy deal”.

He said: “Lots of people are really angry about treatment by energy companies. Obviously it is cold and obviously recent price rise hikes have put a lot of people’s household finances under strain. But we are hoping that people will join in to help us influence the market.”

He said that UK homeowners are collectively paying £4.1 billion a year more than they need to by not switching energy provider.

According to estimates from Ofgem, the energy watchdog, six out of ten people have never switched supplier. This is because the “complex array of deals” makes it “almost impossible” for people to get the best price, Which? said.

The group said: “The Big Switch is a completely new way for people to buy their energy. This will be the first time in the UK that a large number of people can join together as a group to negotiate a deal with energy companies.”

Ed Davey, who replaced Chris Huhne as Energy Secretary last week, said that he is “delighted” at the initiative.

“I have long believed that collective purchasing will be a game-changer in terms of handing power back to consumers,” he said.

He said that as Energy Secretary he is “determined” to “take this agenda forward”.

“I want to make it easier for consumers to club together and use collective purchasing power to reduce their gas and electricity bills. We are looking hard at how we can do this and how we can remove barriers to enable more initiatives like The Big Switch,” said Mr Davey.

David Babbs, an executive director at 38 Degrees, an online campaigning group which is co-launching the initiative, said: "We are all sick of gas and electricity companies ripping us off. The big energy companies act like they are untouchable, but this people-powered campaign can turn the tables and bring prices down."

Caroline Flint, the Shadow Energy Secretary, said that the campaign was a “simple and potentially trailblazing way to help bring down energy bills”.

However she said: “Even if this Government won’t stand up to powerful vested interests in the energy industry, I’m confident the British public will.”

Mr Lloyd said that consumers will have until the end of March to sign up. The reverse auction will happen soon after that.

It is understood that many of the UK’s big and small energy suppliers have already agreed to take part. Others have requested more information before they commit to it.

Which? will handle the actual switching of households’ accounts between companies.